It’s the time of the year when we’re hosting home holiday parties with friends, co-workers, relatives and neighbors. It’s also the time of the year that questions relating to insurance and hosting a holiday party arise. Most of those questions revolve around your potential liability if you serve alcohol.
According to the National Safety Council, travel by motor vehicle has the highest fatality rate of any other form of transportation. Only 88 people died in car accidents on Christmas Day of 2013, but 343 died on New Year’s Day. Fatalities as a result of alcohol impairment consisted of 31 percent of the totals. The possibility of an innocent third person sustaining a severe or fatal injury at the hands of one of your guests is real cause for concern.
A social host is defined as someone that serves alcohol to guests at their home or in a location under their control in a hospitable social setting. The general rule pursuant to Wis. Stat. 125.035 is that a social host in Wisconsin isn’t required to monitor the alcohol consumption of their guests and isn’t liable for their actions. However, a prudent host should certainly watch their guests and not allow excessive drinking that could result in harm.
There is an exception to this rule, however, in the context of minors. If a minor was in your home or a place under your control and consumed alcohol and then injured somebody on or away from the premises, you can be found liable. It is also unlikely that your homeowners liability coverage will provide coverage as most insurers write such a risk off in their policy exclusions. That leaves everything that you have totally exposed.
Don’t permit minor consumption of alcohol on any premises that you own or control under any circumstances.
Premises liability will apply regarding any holiday guest who is injured on a property that you as a social host own or control. Any issue of alcohol consumption may factor in as to whether the person claiming injury was comparatively negligent. If comparative negligence is found, the percentage of negligence attributable to the person claiming injury is deducted from any gross settlement or verdict. For example, if total damages are $40,000, and the claimant is found to be 25 percent negligent, his or her total award would be $30,000. Under Wisconsin law, if the claimant is found to be more than 50 percent at fault for the accident, their case fails in its entirety.
Employment practices liability insurance (EPLI) can cover an employer for wrongful acts that occur during the course of employment. In the context of a holiday party where alcohol is served, those acts might include but not be limited to sexual harassment, discrimination or defamation. That’s why you might want to purchase ELPI coverage to protect you and/or your business from claims of this nature if a guest at your holiday party is allegedly mistreated, whether alcohol may have been involved or not. Regardless of its size, any business can be the target of an employment practices lawsuit. Even if the lawsuit isn’t well founded, it’s going to be very expensive to defend without appropriate insurance coverage.
The best venue for a holiday party might be at a commercial location. In all likelihood, that business will have adequate premises liability and dram shop coverage. Whether you’ll elect for EPLI coverage for your business is up to you, but without insurance coverage, an employment practices lawsuit can get extremely expensive.
If you have questions regarding your liability when hosting a party or get-together of any kind, feel free to contact us at Frydach Insurance, we’d be happy to listen.